Daily Brief, Nov 5: Economic Events Outlook – New Zealand’s Labor Report in Focus - Forex News by FX Leaders
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Daily Brief, Nov 5: Economic Events Outlook – New Zealand’s Labor Report in Focus

Posted Tuesday, November 5, 2019 by
Arslan Butt • 2 min read

Good morning, traders.

On Tuesday, the US dollar traded bullish against the Japanese yen over increasing confidence that the United States and China are on the edge of reaching an initial agreement to peel back the trade war.

During the early Asian session, the Australian dollar traded steady following the Reserve Bank of Australia’s (RBA) decision to leave the monetary policy unchanged, as anticipated. One of the significant concerns of the RBA is the uncertainty regarding consumer spending.

Lately, Beijing and Washington have provided encouraging signs of improvement in trade discussions. The US government is contemplating lifting some tariffs on Chinese products, which is ultimately driving a risk-on sentiment in the market.

AUD – RBA Rate Statement 

One of the significant economic releases today was the RBA rate statement and cash rate decision. The Reserve Bank of Australia (RBA) has held the official interest rate steady in November at 0.75% as clues suggest that the economy is underperforming.

Despite the sales number dispensing Australian retail spending has delayed, most economists had expected the central bank wouldn’t cut to 0.5% till February. With this, the Aussie is trading bullish against its peer currencies today.

GBP – Services PMI – 9:30 GMT

Markit is due to report Purchasing Managers’ Index of the services sector today. As we know, it’s a leading indicator of economic health. Thus the businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company’s view of the economy.

Lately, the British Services PMI figure has been disappointing, and it has dropped below the standard threshold of 50. Even today, economists are expecting a negative PMI figure of 49.6. The Sterling is likely to feel bearish pressure until the news is released which shows lack of confidence from the British purchasing managers.

CAD – Trade Balance – 13:30 GMT

Trade Balance is a difference in value between imported and exported goods and services during the reported month. The Canadian economy is export-oriented, and contributes most to its foreign exchange earnings. Most of the income comes from the exports of crude oil, but due to an increase in the supply of oil and a drop in prices, the Canadian trade balance is likely to fall to -0.6B vs. -1.0B previously.

USD – ISM Non-Manufacturing PMI – 15:00 GMT

The Institute for Supply Management is due to release services PMI figures at 15:00 GMT with a forecast of 53.5 vs. 52.6. Newbies, it’s a survey of about 400 purchasing managers, which asks respondents to rate the relative level of business conditions, including employment, production, new orders, prices, supplier deliveries, and inventories. The negative forecast may keep the US dollar in check.

NZD – Labor Market Figures – 21:45 GMT

Statistics New Zealand is due to report employment change and unemployment rate data at 21:45 GMT. Typically, New Zealand’s employment figures are pretty fragile, as they show massive deviations every month.

Employment Change q/q – It’s forecast to drop from 0.8% to 0.2% this month.

Unemployment Rate – The unemployment data is also expected to rise from 3.9% to 4.1%.

Indeed, both figures are showing slacks in New Zealand’s labor market, which may force the Reserve Bank of New Zealand to keep the interest rates unchanged or dovish.

Good luck for the day and stay tuned to FX Leaders Economic Calendar for live market coverage of these economic data.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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